Inventory Management
As a newly hired manager for a computer manufacturing company, you have been asked to lead your team toward the development of a new inventory system.
In the past, the company has been faced with the challenge of having too many chips in its inventory that become outdated before they can be installed. In addition, on several occasions there has not been enough inventory of parts needed for the install, leading several large clients to move to a different manufacturer. The company is considering using either a just-in-time (JIT) or a materials requirement planning (MRP) inventory system to solve this problem.
Review Inventory Management for more information on inventory management. Using what you have learned throughout the course, please answer the following questions:
What inventory system do you feel will be the best fit for this company? Explain your reasoning.
What improvements do you anticipate will come from this change in inventory systems?
What challenges do you feel the company could run into in implementing a new inventory system?
Sample Solution
I believe that a just-in-time (JIT) inventory system would be the best fit for this company. JIT systems are designed to minimize inventory levels by delivering parts or products just as they are needed. This can help to reduce costs, improve efficiency, and increase customer satisfaction.Full Answer Section
The company's current inventory system has been causing problems with outdated chips and not enough inventory of parts needed for installs. JIT can help to address both of these issues. By delivering parts just as they are needed, the company can avoid having too many outdated chips in inventory. JIT can also help to ensure that there is always enough inventory of parts needed for installs, which will help to prevent customer dissatisfaction. In addition, JIT can help to improve the company's efficiency. By reducing inventory levels, the company can free up space and resources that can be used for other purposes. JIT can also help to improve the company's cash flow, as it will no longer need to spend money on storing excess inventory. What improvements do you anticipate will come from this change in inventory systems? I anticipate that the following improvements will come from this change in inventory systems:- Reduced inventory levels: JIT will help to reduce inventory levels, which will free up space and resources that can be used for other purposes.
- Improved efficiency: JIT can help to improve the company's efficiency by reducing the amount of time and resources that are spent on storing and managing inventory.
- Increased customer satisfaction: JIT can help to increase customer satisfaction by ensuring that there is always enough inventory of parts needed for installs.
- Improved cash flow: JIT can help to improve the company's cash flow by reducing the amount of money that is spent on storing excess inventory.
- Resistance from employees: Employees may be resistant to change, especially if they are used to the old inventory system. It will be important to communicate the benefits of the new system to employees and to get their buy-in.
- Technical challenges: There may be technical challenges involved in implementing a new inventory system. The company will need to make sure that the new system is compatible with its existing systems and that it can be implemented smoothly.
- Cost: Implementing a new inventory system can be expensive. The company will need to make sure that the benefits of the new system outweigh the costs.